thegreekdog wrote:No offense intended Player, but you didn't answer any of my questions. You merely restated your positions on issues. I think it would be more helpful for a discussion if you actually answered the questions. They will at least make you think about your position. I'm not coming at this from the idea that officer salaries are where they should be, I'm wondering what the benefits would be if officer salaries were more in line with where they were 50 years ago.

I did, by saying that your questions are basically irrelevant... and well, that is a big part of the problem. Folks one one side want to say "but...." and look at a very narrow set of issues, never even consider that the problem might lie elsewhere. That happens on ALL sides. I am, at times guilty, though in this case I really don't believe I am.

That said, I will take your questions point by point -- but I think the real answer is in the last few paragraphs I wrote above.

(oops.. started answering without copying your questions first, so will post this, then go back and edit.. apologies)

thegreekdog wrote:

stahrgazer wrote:While this is true, it's also true that in the past 4 decades, CEO salaries have risen until they make like 100x of what their lowest worker makes, whereas before that, they made only about 10X what their lowest worker made.

It started around the same time Congress voted themselves a 100x raise. Coincidence? Maybe not.

Each ceo that makes 100x his lowest worker is taking up the funds that could provide for 25 or more jobs, and in many cases, they have laid off workers in order to meet their "profit" quota to get their bonuses.

I guess I have a few questions for you:

(1) Do you think if CEO salaries now were more in line with CEO salaries 40 years ago, there would be a recognizable difference in the incomes of the large majority of people in the United States?

I would guess that you would have to go back further than 40 years to find the real differentiation, but yes. Maybe the 60's, though without doing more research, which I am too lazy to do at the moment (well, too lazy and still rather inept at finding such answers effectively), I hesitate to pinpoint an exact time.

In some ways that alone is irrelevant because so very much has changed. The ratio of healthcare cost, for example, the amount of employment over seas, etc all change the basic ratio of CEO bonuses and salaries to the salaries and bonuses of average employees.

One interesting "case study", if you will, in this debate is Ben and Jerry's Ice cream. You may be aware that they began with the idea that the CEO should not be paid more than a certain percentage more than the lowest paid employee. When the original owners stepped down, then they had trouble finding competent CEOs willing to work for that low of a wage. I don't know the specifics, but I do remember hearing that they were using way too low of a ratio.

Anyway, I would argue that while their ratio may have been too low, the current ratio is too high. However, more to the point, in my arguments, is that even just looking at a straight ratio is wrong. Often times CEO compensation comes in a variety of "unseen" ways that boost their income artificially... and much of the income that lower level employees get is more and more being cut into in similarly unseen ways. Just to pick 2 minor examples, many CEOs get a lot of free dining and entertainment rewards. Employees, to contrast often find that they have to pay more and more for basic healthcare, may have to buy more and more of the basic supplies they need to do their jobs -- be it something like cleaning supplies and toilet paper (not joking there, by-the-way) or uniforms. CEOs like to almost dismiss the banquets and such they attend as minor perks, not any real kind of compensation, even if the $20-30 bare minimum cost (more often much, much more) would make a huge difference in the salaries of lower level employees. To contrast, employees being asked to pay even $30-50 a month to clean uniforms can make the difference between their child playing baseball or not.

In many ways, more than the actually money amounts, the attitude difference is what really burns.

thegreekdog wrote:(2) If companies did not pay their CEOs such exorbitant salaries, where do you think the money would go? Do you think companies would spend on infrastructure or more employees or better employees salaries? See question (4).

Right now, it would most likely either be store-housed for the future or go to pay off shareholders.

When I look at the disparity of salaries, it is not because CEOs getting high salaries is in and of itself the problem, rather its a very tangible symptom of a system that is broken. (and that is why I said your questions were basically irrelevant)

thegreekdog wrote:(3) How do you propose to get companies to pay their CEOs less money?

That, alone, won't do it. Rather, the way CEOs and shareholders currently calculate their "just returns" is skewed in ways that harm both the companies themselves in many cases and certainly society.

I am not going to pretend I know enough about business models and such to come up with specific formulae. I will say that a few basic principles should apply.

#1. NO employee.. not the most menial, should be paid less than it takes a full time employee at that wage to live in that area. A few, and only a few exceptions should be allowed for trainee kids... However, unless we are talking high school students who still live at home, the compensation should include some kind of residence provision. This might require some creativity... I mean, some employees maybe could put a student up for a few months in the summer (with parental approval, etc, etc,) or things like that. Also, I have no problem with saying a college student even should stay in a tent in a local campground (well... depends on the job, rather hard to keep tuxes neat when you are living in a tent) or even bunking on a couch in the office, if there is a shower nearby. HOWEVER, note that these are all short term things for real kids who are truly training, not things that would work for older people. Allowing companies to pay less means that the employer is depending on someone else to support this person. IF its another part-time job.. maybe OK. (note I specified fulltime). However, we all know that a lot of companies use that "part-time employee" bit to hire people for 39.99 hours.. or whatever the state mandates for turning someone full time. AND, many jobs just don't allow "double dipping" if one wants to really have any kind of life at all. Restaurants, in particular are notorious for having varied shifts. While that is understandable, it means that working part-time at more than one job can be problematic. In some of those cases, people really should get at least minimum basic compensation that would amount to fulltime employment (and many actually do in the restaurant business, because it is one of the few businesses with a very direct customer appreciation/service -compensation link).

#2. No perks for anyone that are not directly counted. In particular, things like taking a client out to dinner should not be a tax deductable item. If its worth the business to take them out and "wine and dine" them.. fine. If not, then not. There should be a minor limit for the individaul. If a company wants to give its employees a chicken bar-b-que as a thank you for so many days without injuries or whatever, the employee should not be taxed on that minimal amount. Also, if a higher level employee is actually required to go to a function, then I don't think they should have to report even a high-priced meal as compensation (i could see someone such as yourself basically being required to go to a $500 plate dinner on behalf of your company.. and that that would be a significant chunk of change you would choose to use otherwise if you could. However, the company should not be able to deduct that as a "business expense"). The result of this is that a lot of catering and meals would stop. That would impact the entertainment industry, but its the kind of thing that has just spun way out of control and that really, really grates on lower level employees.

I mean, just as an example, my company is over budget. The CEO stated that ALL departments, even those already under budget and already working as cost effectively as they can have to cut 6%. So, kitchen employees are being told things like reuse hair nets .. but when it was suggested that catered meals for the muckity mucks be cut out... nope, no dice. I am not joking! Not even snacks (which amount to several hundred dollars a month) can possibly be shifted to off brand types or just the less expensive items! Meanwhile, every employee in the kitchen is given a workload that requires them to show up 10-15 minutes before their paid shift starts, sometimes more than that. Note, employees can clock in 10 minutes in advance of their shift and no sooner. IF they get injured without clocking in, the company will not pay. This HAS happened! That is the type of stuff that really winds up making lower level employees feel put upon. It is already illegal, in fact. Yet, with the unemployment rate so high in our area, no body feels they can complain. Unless and until CEOs, managers of all levels are held more accountable for such things, then nothing will change. That is what unions used to do, but unions have been attacked and marginalized. In the meantime, the CEO brings in over 300K... and is not taking a penny off his paycheck. (note that you can buy a very, very fancy house with an indoor pool and so forth for under $200K in my area, just to give you an idea of what that kind of salary buys).

#3. CEO and stockholder compensation should be tied only to real and true profits that a company generates. Of course, startup companies need to pay CEOs before they actually make a profit, but there should be a time limit or "situational" limit. (that last might apply most for some brand new esentially research firms -- its OK to support some research and product development even if it doesn't immediately pan out, but there have to be specific goals -- not necessarily production goals, but do xyz type goals, with the understanding that xyz has to be tried and may or may not become profitable)

thegreekdog wrote:(4) How do you propose to get companies that pay their CEOs less money to pay more money to employees? Could companies pay shareholders more? Could companies keep more cash on hand?

Shareholder and CEO profits should be directly tied to profits from the product the company sells. BUT... the real problem is that a lot of gimmics are used to calculate that profit. Further, the real product that interests most managers is the stock price. I could see reason for some kind of statuatory limit based on profits, but I can also see a lot of potential for problems with such a system.

I am more comfortable with requiring better accounting of real costs, including that when companies pay very low wages they are putting additional burden on taxpayers to support those employees. I have said it before, but will reiterate in case you forget, but that is OK if we are talking about specific groups -- true trainees (with definite limited training periods that lead specifically into real jobs in one way or another); ex prisoners and work release folks; some disabled individuals, particularly the developmentally disabled. In most of those cases we are either talking about a temporary loss to the individual that will result in an ultimate gain for them and society (training leads to better paying jobs overall; prisoners who need to be given some chance) OR we are talking about people who need help and thus any compensation they get really is a bonus to society.

thegreekdog wrote:(5) How many CEOs make too much money?

I am not even going to try to come up with a set number, because this is not about x number of CEOs, it is about an overall mentality that has led to a plain broken system and distorted idea of what compensation should be for those at the top.

Have you ever watched the show undercover Boss? Its stupid and mamby-pamby, but it also points out some common threads.. specifically that virtually every one of the bosses is legitimately shocked by the amount of work and effort required of lower level employees and the fact that they generally do not feel appreciated -- not just that they are not being paid well, but that they don't feel appreciated or supported in practical or esoteric ways. Sometimes janitors have to buy their own supplies, training and advancement opportunities are often non-existant, etc, etc.

thegreekdog wrote:(6) How much money is too much money?

This is not about absolute compensation, even aside from inflation and profit variables. Rather, it is about an attitude of value.

One way to look at the problem is to say that most people over value their own impact/value. The more powerful a person is, the more they tend to overvalue themselves in an objective sense. This sometimes gets labeled a "prima donna" effect, but people tend to use that term more for flamboyant stars, not CEOS in suits. In both cases, there can be some legitimacy. I would actually suggest that it is more true for the stars than CEOs, simply because their entire operations tend to truly depend upon that star's success. CEOs are, to some extent, tradable. At least as much as any of the top people in a field might be.

However, the point is not that a CEO should make what a janitor makes. The point is that when it comes to cutting costs and efficiency, the thinking tends to (not always, but often) start with "OK, I need to make x amount..." "how can I keep that happening" (or the shareholders want to make x...). Pressure gets passed down. Lower level employees are considered basically like machines that have to be squeezed for efficiency. Competency is often dismissed as not pertinent. Just think of the title "unskilled labor" -- yet, the truth is that even menial jobs tend to involve some skill. A person who has done the job a long time performs better than one who doesn't. BUT... these people get squeezed and squeezed. At some point, they wind up doing things like coming in early in unpaid time, even if they know that they are at risk if they get injured in that time; buying their own supplies out of already limited incomes. Even things like time schedules are just not thought out by managers except as what is convenient for them. Many part-timers, for example wind up having to pay for fulltime childcare becuase childcare providers demand that you enroll for specified times and pay whether the child shows up or not. Sure, its understandable that they each do that.. but the worker winds up "taking it in the shorts". These types of issues just are rarely considered by upper management.

In some cases, there could be solutions that would work for everyone better, IF the managers were willing and encouraged to think more creatively, but there is no insentive. In some cases, the understanding of what fulltime labor and compensation should be needs to change. IF you are basically requiring your employees to leave open 60 hours a week.. even though you only are willing to pay them 15 hours, with expansions to 35 sometimes, then maybe you ought to have to pay a bit more for that 15 hours baseline. But, figuring out how to do that in a way that is equitable to all is the catch. Mostly, such things are not even considered unless unions are involved because there is absolutely no incentive for upper management to even consider the needs of lower level employees beyond the legal requirements (and often there is a lot of thought about getting around and stretching those rules)

thegreekdog wrote: (7) Multiply (5) by (6) and we have the amount of available money for spending by companies on something other than CEOs. How much do you think that is?

Irrelevant, because the system will flex to meet the needs. That means that businesses that cannot provide reasonable compensation will fold, as many businesses do anyway and those that can will continue to fourish. The difference is that because compensation is truly trickling down, more money will flow into the market and thus up. Its a cycle that moves our country up, not down. The current "trickle down", think of the top first and everyone else after... is why our country is sliding.

thegreekdog wrote:(8) How do you think CEO salaries got so high?

Stargazer got this correct. "Because they could".

People who get to be CEOs are probably more prone to pay themselves more than deserved because they are inherently people who value money and who are skilled at manipulating people and money systems. As I said before, this is true, to some extent for a lot of people, but in CEOs the particular issue is that the very skills and values that make them good CEOs tend to make them value money and power more than most people (at least while they are still working). Also, its more evident when they are because the amounts of money involved are so great.

Anyway, even without any bias or skewing, people tend to value their own value more, those at the top are the ones setting the value for a structure and so its really no wonder that the value of CEOs and higher level executives of all types keeps growing while the compensation for lower employes stagnates or shrinks. This doesn't hold true for a middle realm I will call "skilled labor" or "professions", because these tend to have more inbuilt systems to judge their value. For example, a doctor and nurse bring an inherent and quantifiable value to an organization. Identifying the value of the janitor is much harder. Ironically, though, if you look at how patients really value a hospital, you find that cleanliness is pretty high.

What happens is that hiring and firing janitors is a royal pain, so the manager tends to say "let's just contract out". Then they no longer have to worry about how much work each janitor is doing, the pay rate they should get or any of the other messy details. They don't have to worry about hiring and firing. They just pay the contract bill, set the standards and smile at the employees of the janitor firm (if they happen to see them)... and "all is good", problem solved. Now.. IF it happens that the janitorial service is keeping its wages low by hiring illegal immigrants or just hiring people for barely above minimum wage, or is a family operation that uses its own underage kids to get the work done, then that is no concern of the hospital management. If the hospital gets complaints about cleanliness, then that gets passed on. The janitorial company then demands more of its workers... often to the point that the workers are working unpaid time or buying supplies or whatever. The CEO/management (of course the CEO usually doesn't make direct decisions about janitorial services) crows about the money saved, the efficiency... and society takes it in the shorts.

Anyway, all of that has always happened. In the 1980's things got skewed by a couple of factors. First, Reagan raided the social security trust, "borrowed" the money to pay down the debt. About the same time, the idea that average people needed to invest in the stock market and that this was where they should get their retirement money began to take hold. People began to invest in mutual funds, pensions got fewer and fewer and things like IRAs and 401Ks came onto the horizon (IRAs were around back then, not sure when 401K's came about, though there were things like that earlier). This was OK in the 80's and even into the 90's.. or SEEMED OK becuase so many people really did make so much money.

THEN... the bust. Millionaires, the well off did fine. They had enough put aside in their tax funds (other than a few major rip-offs like Enron, etc) to largely ride the tide, but many, many more average people found that instead of retirement, they had poverty. EXCEPT... instead of social security becoming the saving grace it became the promise that we should not rely upon.

Anyway, during the good times, no one really cared if CEOs were making huge amounts of money. EVERYONE was making money and it all seemed good, at least on the surface. You did have more than a few nay-sayers, even then complaining that things were off. You absolutely had a lot of criticism from the broad environmental movement, but also folks like Warren and Susan Orman warning people to be more careful in their expectations and money management, but also saying that CEOs and companies were driving things in worng directions. Health care sort of got mixed in because technological advances drove, continue to drive costs up so very high and yet the compensation models for most people for health care coverage were shrinking in comparison. (that is, even when they did not shrink, they did not keep up with the costs)

Question One: If CEO salaries in 2013 were more in line with CEO salaries in 1963, would there be a recognizable difference in the relative incomes of the larger majority of people in the United States?

Player Answer to Question One: Yes, but the question is largely irrelevant because other items have changed.

Response to Player: I agree with the premise that other things have changed and I agree that the question is irrelevant. And that is precisely why I asked the question. The question is impossible to answer. Therefore, the premise that you have (CEOs are paid too much and therefore that affects salaries of workers) is not a good premise. The question above presupposes that a drop in CEO salaries would equal a rise in employee salaries... we can't say that with any certainty.

Question Two (related to Question One): If corporate officers were not paid higher salaries, where would the money go?

Player Answer to Question Two: Store-housed (kept in the coroporation presumably) or to pay off shareholders.

Response to Player: I agree, again. So the issue is that the reduction in officer compensation would not go to paying employees more, it would go to shareholders (my opinion) and also would not solve your issue with income disparities.

Question Three: How do you propose to get companies to pay their corporate officers less money?

Player Answer to Question Three: Reducing corporate officer salaries won't do the job. Ultimately the issue comes down to forcing companies to pay employees a living wage (not yet defined).

Response to Player: Based upon our answers to Questions One and Two, is this question not irrelevant now? You seem to think it is irrelevant. We've demonstrated that reducing corporate officer salaries will not solve an income disparity problem so why should we force (whether overt or otherwise) companies to pay their corporate officers less money? As far as paying employees a wage sufficient to live on, we need to define what the term "living wage" means, but that's not really relevant to this discussion. The discussion of corporate officer salaries stems from Stahrgazer and your view that corporate officers are paid too much. Since we've demonstrated that it doesn't matter what corporate officers are paid, the real issue you have (and maybe Stahrgazer has) is with the company itself (and its shareholders). So maybe we need to shift the discussion.

Question Four: How do you propose to get companies that pay their corporate officers less money to pay more money to employees? Could companies pay shareholders more? Could companies keep more cash on hand?

Player Answer to Question Four: Shareholder and corporate officer profits should be tied to profits from the product the company sells, and those profits are tied to gimmicky accounting practices. We need better accounting practices.

Response to Player: First, shareholder and corporate officer profits are, for the most part, tied to the company's profits. Shareholders don't get dividends or an increase in the value of stock unless the company does well. Corporate officers don't get stock benefits (the vast majority of their compensation) unless the company does well. I can't speak to accounting gimmicks, but most people will tell you that inflated corporate profits are no longer an issue after Sarbanes-Oxley and Enron.

Question Five: How many corporate officers make too much money?

Player Answer to Question Five: This is not about the number of corporate officers, but about the mentality. Also, Undercover Boss.

Response to Player: It is about the number of corporate officers who make too much money. Your whole original premise was that corporate officers make too much money which ultimately punishes employees. I don't agree with that premise (obviously), but it's clear that we can throw that premise out now, no? Also, Undercover Boss is a tool by which a corporate officer and the corporate officer's company can look good. I watched a few episodes and I can honestly say it's a disgusting show. The corporate officer picks out three or four employees and throws them some minor amount of money and the corporate officer looks like a great guy, the company looks great, and it's free advertising. The boss isn't really shocked by the amount of work and effort. And the employees never seem to be appreciative of the amount of work and effort on the part of the corporate officer. In sum, the show is a stupid advertising venture that is very effective at what it is. To equate that show to an understanding of corporate culture is moronic.

Question Six: How much money is too much money?

Player Answer to Question Six: This is not about compensation, it is about an attitude of value. Corporate officers are overvalued.

Response to Player: If it is an attitude about value, it is then about compensation. Corporate officers are simply not overvalued. This is not debatable. If corporate officers were overvalued, then compensation for corporate officers would decrease. Barring any statutory or regulatory requirements as to minimum pay for corporate officers, there is no floor or ceiling to corporate officer compensation (except for minimum wage).

Question Eight: How do you think corporate officer salaries got so high?

Player Answr to Question Eight: Because they could.

Response to Player: First of all, corporate officers do not determine their own salaries. That's ridiculous, especially with respect to CEOs, CFOs, etc. Board of directors determine corporate officer salaries. Second, you indicated multiple times in other answers that you didn't care about corporate officer salaries and their amounts. So how can you place a value other than what the compensation is and how can you denigrate the corporate officers' salaries without knowing how much money is too much?

BigBallinStalin wrote:Player, let's assume that "a living wage" is known and certain. So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

To Player? No. She would add more elements to her "living wage."

Related aside - The term "living wage" is such a ridiculous misnomer. A janitor is making a living wage (because he/she can live on that wage), but Player doesn't think he's making a "living wage."

From wiki:

In public policy, a living wage or subsistence wage is the minimum income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation, although in many cases child care, education, saving for retirement, and less commonly legal fees and insurance may cost a family more than food, utilities, transport, or health care. In addition to this definition, living wage activists further define "living wage" as the wage equivalent to the poverty line for a family of four.

MIT has a living wage calculator (link below).

In Philadelphia, one person must earn $10.09 an hour working 2,080 hours a year (or 40 hours a week, $403.60 a week) to support his or herself. That's a little more than minimum wage.

If that person worked the amount that I work in a given week (65 hours), that person could make a living wage on $6.29 an hour. Just saying.

thegreekdog wrote:Question One: If CEO salaries in 2013 were more in line with CEO salaries in 1963, would there be a recognizable difference in the relative incomes of the larger majority of people in the United States?

Player Answer to Question One: Yes, but the question is largely irrelevant because other items have changed.

Only part of my answer. The real part is that this is only a reflection of a deeper issue, not the problem itself.

thegreekdog wrote:Response to Player: I agree with the premise that other things have changed and I agree that the question is irrelevant. And that is precisely why I asked the question. The question is impossible to answer. Therefore, the premise that you have (CEOs are paid too much and therefore that affects salaries of workers) is not a good premise. The question above presupposes that a drop in CEO salaries would equal a rise in employee salaries... we can't say that with any certainty.

Which is why it is not precisely what I have said. Again, CEO salaries is just measure of a broken system, not the problem.

Sort of like smoke lets you know there is a fire. Smoke is dangerous in and of itself, sure, but the real problem is the fire.. dealing with just the smoke and not the fire won't get you as far as dealing with the fire and then worrying about the smoke.

Or, you could talk about dealing with a cough instead of a cold or the flu. In the case of a cold, we cannot fundamentally offer a cure, but only deal with the symptoms. In the case of the flu, you can, now, deal with the disease itself.. and its important to try.

thegreekdog wrote:Question Two (related to Question One): If corporate officers were not paid higher salaries, where would the money go?

Player Answer to Question Two: Store-housed (kept in the coroporation presumably) or to pay off shareholders.

Response to Player: I agree, again. So the issue is that the reduction in officer compensation would not go to paying employees more, it would go to shareholders (my opinion) and also would not solve your issue with income disparities.

See my answer above. This is precisely why I did not "directly answer" your questions initially, just said you were focusing on the wrong thing.

thegreekdog wrote:Question Three: How do you propose to get companies to pay their corporate officers less money?

Player Answer to Question Three: Reducing corporate officer salaries won't do the job. Ultimately the issue comes down to forcing companies to pay employees a living wage (not yet defined).

Response to Player: Based upon our answers to Questions One and Two, is this question not irrelevant now? You seem to think it is irrelevant. We've demonstrated that reducing corporate officer salaries will not solve an income disparity problem so why should we force (whether overt or otherwise) companies to pay their corporate officers less money? As far as paying employees a wage sufficient to live on, we need to define what the term "living wage" means, but that's not really relevant to this discussion. The discussion of corporate officer salaries stems from Stahrgazer and your view that corporate officers are paid too much. Since we've demonstrated that it doesn't matter what corporate officers are paid, the real issue you have (and maybe Stahrgazer has) is with the company itself (and its shareholders). So maybe we need to shift the discussion.

Again, you are missing the point... and after all this, I have to wonder if not intentionally. Corporate salaries, concentration of wealth into the hands of a few IS a problem in and of itself, becuase their having so much means that those under don' t have. If they simply took their bonuses and, say, gave each employee an added $5000, it would make a very big difference in their lives and in the economy without really making a huge dent in the lifestyle of the very top folks (not the 1%. but the 0.0001% maybe -- or some such)

HOWEVER, that won't happen and any mandate to make it happen will fail for a variety of reasons. We need to change the value system, the paradigm. Companies need to be held responsible for their actions, whether it is paying CEOs so much the company folds or underpaying employees so much that they contribute to our national debt through entitlement dependence. And no, simply waiting for these companies to fold doesn't work because the CEOs still profit from doing this, which is why it continues.

thegreekdog wrote:Question Four: How do you propose to get companies that pay their corporate officers less money to pay more money to employees? Could companies pay shareholders more? Could companies keep more cash on hand?

Player Answer to Question Four: Shareholder and corporate officer profits should be tied to profits from the product the company sells, and those profits are tied to gimmicky accounting practices. We need better accounting practices.

Response to Player: First, shareholder and corporate officer profits are, for the most part, tied to the company's profits. Shareholders don't get dividends or an increase in the value of stock unless the company does well. Corporate officers don't get stock benefits (the vast majority of their compensation) unless the company does well. I can't speak to accounting gimmicks, but most people will tell you that inflated corporate profits are no longer an issue after Sarbanes-Oxley and Enron.

Again, you are missing a key part of what I said. What you call profit is not always real and true profit in the real sense it used to be calculated, that is, money left after deducting the cost of making a product and other costs such as investment and research. Further, companies are allowed to ignore many, many costs that are passed onto taxpayers -- such as underpaying employees, disposal costs, etc..

thegreekdog wrote:Question Five: How many corporate officers make too much money?

Player Answer to Question Five: This is not about the number of corporate officers, but about the mentality. Also, Undercover Boss.

Response to Player: It is about the number of corporate officers who make too much money. Your whole original premise was that corporate officers make too much money which ultimately punishes employees. I don't agree with that premise (obviously), but it's clear that we can throw that premise out now, no?

NO, that was what you assumed my premise was, but what I pretty clearly said was not my premise. My premise is that yes, most CEOs make too much money, and yes, the lowest level employees are undervalued. But... you ignore a whole range of solutions and issues I presented. The details matter.

thegreekdog wrote:Also, Undercover Boss is a tool by which a corporate officer and the corporate officer's company can look good. I watched a few episodes and I can honestly say it's a disgusting show. The corporate officer picks out three or four employees and throws them some minor amount of money and the corporate officer looks like a great guy, the company looks great, and it's free advertising. The boss isn't really shocked by the amount of work and effort. And the employees never seem to be appreciative of the amount of work and effort on the part of the corporate officer. In sum, the show is a stupid advertising venture that is very effective at what it is. To equate that show to an understanding of corporate culture is moronic.

I believe I said the show was stupid...Even so, it presents a carachiture of a real problem that absolutely does exist.. and ALL of the issue I brought up were very real and true, but you nicely ignored them.

thegreekdog wrote:Question Six: How much money is too much money?

Player Answer to Question Six: This is not about compensation, it is about an attitude of value. Corporate officers are overvalued.

Response to Player: If it is an attitude about value, it is then about compensation. Corporate officers are simply not overvalued. This is not debatable. If corporate officers were overvalued, then compensation for corporate officers would decrease. Barring any statutory or regulatory requirements as to minimum pay for corporate officers, there is no floor or ceiling to corporate officer compensation (except for minimum wage).

Sorry, but is debatable, but its nice of you to try and narrow everything into simplicity.. and pretend I am the one ignoring stuff.

thegreekdog wrote:Question Eight: How do you think corporate officer salaries got so high?

Player Answr to Question Eight: Because they could.

Response to Player: First of all, corporate officers do not determine their own salaries. That's ridiculous, especially with respect to CEOs, CFOs, etc. Board of directors determine corporate officer salaries. Second, you indicated multiple times in other answers that you didn't care about corporate officer salaries and their amounts. So how can you place a value other than what the compensation is and how can you denigrate the corporate officers' salaries without knowing how much money is too much?

LOL.. technically, correct, but in reality, CEOs place demands that are rarely questioned, and CEOs cater to boards. Its a nice neat system.. as long as you are not at the bottom.

Per the rest.. I really don't care how far the top goes, as long as they only take it AFTER paying the bottom fairly. This is an age old battle, but many of us thought we were past the days of starvation wages and what amounts to bond servitude. Yet, those at the top are quite happy to claim they owe those lower down nothing, are being used and abused... while ignoring even basic labor laws regarding hours and compensation, while demanding that the lowest paid employees provide supplies for work that while they themselves keep aquiring unneeded goodies.

Oh, for the record, the reason that the disparity in wealth matters is history. EVERY great nation in history that has seen such disparity has been on its way down.

thegreekdog wrote:Question One: If CEO salaries in 2013 were more in line with CEO salaries in 1963, would there be a recognizable difference in the relative incomes of the larger majority of people in the United States?

Player Answer to Question One: Yes, but the question is largely irrelevant because other items have changed.

Only part of my answer. The real part is that this is only a reflection of a deeper issue, not the problem itself.

thegreekdog wrote:Response to Player: I agree with the premise that other things have changed and I agree that the question is irrelevant. And that is precisely why I asked the question. The question is impossible to answer. Therefore, the premise that you have (CEOs are paid too much and therefore that affects salaries of workers) is not a good premise. The question above presupposes that a drop in CEO salaries would equal a rise in employee salaries... we can't say that with any certainty.

Which is why it is not precisely what I have said. Again, CEO salaries is just measure of a broken system, not the problem.

Sort of like smoke lets you know there is a fire. Smoke is dangerous in and of itself, sure, but the real problem is the fire.. dealing with just the smoke and not the fire won't get you as far as dealing with the fire and then worrying about the smoke.

Or, you could talk about dealing with a cough instead of a cold or the flu. In the case of a cold, we cannot fundamentally offer a cure, but only deal with the symptoms. In the case of the flu, you can, now, deal with the disease itself.. and its important to try.

thegreekdog wrote:Question Two (related to Question One): If corporate officers were not paid higher salaries, where would the money go?

Player Answer to Question Two: Store-housed (kept in the coroporation presumably) or to pay off shareholders.

Response to Player: I agree, again. So the issue is that the reduction in officer compensation would not go to paying employees more, it would go to shareholders (my opinion) and also would not solve your issue with income disparities.

See my answer above. This is precisely why I did not "directly answer" your questions initially, just said you were focusing on the wrong thing.

thegreekdog wrote:Question Three: How do you propose to get companies to pay their corporate officers less money?

Player Answer to Question Three: Reducing corporate officer salaries won't do the job. Ultimately the issue comes down to forcing companies to pay employees a living wage (not yet defined).

Response to Player: Based upon our answers to Questions One and Two, is this question not irrelevant now? You seem to think it is irrelevant. We've demonstrated that reducing corporate officer salaries will not solve an income disparity problem so why should we force (whether overt or otherwise) companies to pay their corporate officers less money? As far as paying employees a wage sufficient to live on, we need to define what the term "living wage" means, but that's not really relevant to this discussion. The discussion of corporate officer salaries stems from Stahrgazer and your view that corporate officers are paid too much. Since we've demonstrated that it doesn't matter what corporate officers are paid, the real issue you have (and maybe Stahrgazer has) is with the company itself (and its shareholders). So maybe we need to shift the discussion.

Again, you are missing the point... and after all this, I have to wonder if not intentionally. Corporate salaries, concentration of wealth into the hands of a few IS a problem in and of itself, becuase their having so much means that those under don' t have. If they simply took their bonuses and, say, gave each employee an added $5000, it would make a very big difference in their lives and in the economy without really making a huge dent in the lifestyle of the very top folks (not the 1%. but the 0.0001% maybe -- or some such)

HOWEVER, that won't happen and any mandate to make it happen will fail for a variety of reasons. We need to change the value system, the paradigm. Companies need to be held responsible for their actions, whether it is paying CEOs so much the company folds or underpaying employees so much that they contribute to our national debt through entitlement dependence. And no, simply waiting for these companies to fold doesn't work because the CEOs still profit from doing this, which is why it continues.

thegreekdog wrote:Question Four: How do you propose to get companies that pay their corporate officers less money to pay more money to employees? Could companies pay shareholders more? Could companies keep more cash on hand?

Player Answer to Question Four: Shareholder and corporate officer profits should be tied to profits from the product the company sells, and those profits are tied to gimmicky accounting practices. We need better accounting practices.

Response to Player: First, shareholder and corporate officer profits are, for the most part, tied to the company's profits. Shareholders don't get dividends or an increase in the value of stock unless the company does well. Corporate officers don't get stock benefits (the vast majority of their compensation) unless the company does well. I can't speak to accounting gimmicks, but most people will tell you that inflated corporate profits are no longer an issue after Sarbanes-Oxley and Enron.

Again, you are missing a key part of what I said. What you call profit is not always real and true profit in the real sense it used to be calculated, that is, money left after deducting the cost of making a product and other costs such as investment and research. Further, companies are allowed to ignore many, many costs that are passed onto taxpayers -- such as underpaying employees, disposal costs, etc..

thegreekdog wrote:Question Five: How many corporate officers make too much money?

Player Answer to Question Five: This is not about the number of corporate officers, but about the mentality. Also, Undercover Boss.

Response to Player: It is about the number of corporate officers who make too much money. Your whole original premise was that corporate officers make too much money which ultimately punishes employees. I don't agree with that premise (obviously), but it's clear that we can throw that premise out now, no?

NO, that was what you assumed my premise was, but what I pretty clearly said was not my premise. My premise is that yes, most CEOs make too much money, and yes, the lowest level employees are undervalued. But... you ignore a whole range of solutions and issues I presented. The details matter.

thegreekdog wrote:Also, Undercover Boss is a tool by which a corporate officer and the corporate officer's company can look good. I watched a few episodes and I can honestly say it's a disgusting show. The corporate officer picks out three or four employees and throws them some minor amount of money and the corporate officer looks like a great guy, the company looks great, and it's free advertising. The boss isn't really shocked by the amount of work and effort. And the employees never seem to be appreciative of the amount of work and effort on the part of the corporate officer. In sum, the show is a stupid advertising venture that is very effective at what it is. To equate that show to an understanding of corporate culture is moronic.

I believe I said the show was stupid...Even so, it presents a carachiture of a real problem that absolutely does exist.. and ALL of the issue I brought up were very real and true, but you nicely ignored them.

thegreekdog wrote:Question Six: How much money is too much money?

Player Answer to Question Six: This is not about compensation, it is about an attitude of value. Corporate officers are overvalued.

Response to Player: If it is an attitude about value, it is then about compensation. Corporate officers are simply not overvalued. This is not debatable. If corporate officers were overvalued, then compensation for corporate officers would decrease. Barring any statutory or regulatory requirements as to minimum pay for corporate officers, there is no floor or ceiling to corporate officer compensation (except for minimum wage).

Sorry, but is debatable, but its nice of you to try and narrow everything into simplicity.. and pretend I am the one ignoring stuff.

thegreekdog wrote:Question Eight: How do you think corporate officer salaries got so high?

Player Answr to Question Eight: Because they could.

Response to Player: First of all, corporate officers do not determine their own salaries. That's ridiculous, especially with respect to CEOs, CFOs, etc. Board of directors determine corporate officer salaries. Second, you indicated multiple times in other answers that you didn't care about corporate officer salaries and their amounts. So how can you place a value other than what the compensation is and how can you denigrate the corporate officers' salaries without knowing how much money is too much?

LOL.. technically, correct, but in reality, CEOs place demands that are rarely questioned, and CEOs cater to boards. Its a nice neat system.. as long as you are not at the bottom.

Per the rest.. I really don't care how far the top goes, as long as they only take it AFTER paying the bottom fairly. This is an age old battle, but many of us thought we were past the days of starvation wages and what amounts to bond servitude. Yet, those at the top are quite happy to claim they owe those lower down nothing, are being used and abused... while ignoring even basic labor laws regarding hours and compensation, while demanding that the lowest paid employees provide supplies for work that while they themselves keep aquiring unneeded goodies.

Oh, for the record, the reason that the disparity in wealth matters is history. EVERY great nation in history that has seen such disparity has been on its way down.

Hey, I'm not the one that brought up corporate officers salaries as a problem, you and Stahrgazer did. If it's a symptom of a larger problem, then perhaps you should address the larger problem and not bitch and moan about corporate officer salaries.

thegreekdog wrote:Hey, I'm not the one that brought up corporate officers salaries as a problem, you and Stahrgazer did. If it's a symptom of a larger problem, then perhaps you should address the larger problem and not bitch and moan about corporate officer salaries.

I don't know about stargazer, but I have brought it up as an example of a broken system. Any discussion of modifying corporate salaries was part of that discussion.

And, just like in a fire smoke kills.. I am not saying that large corporate salaries are OK, by any stretch of the imagination. I am saying that actually fixing the problem, as opposed to just dealing with a particular symptom, means going much deeper.

A bigger problem than a few corporations paying too much is that lower level employees are working hard and yet still not getting paid enough to get by... and a whole range of people seem to think we should cut out government aid and just blame the low level employees for not doing more, with no responsibility for the companies in question. I say thats blaming the victim.. a common theme, but a sad one.

Even you, in your discussions, often make it very clear that you don't consider yourself well off, despite the fact that you sit well in the top tier of income earners. When you don't appreciate how well off you are, its easy to pretend that others are not doing so badly, either.

BigBallinStalin wrote:Player, let's assume that "a living wage" is known and certain. So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

To Player? No. She would add more elements to her "living wage."

Related aside - The term "living wage" is such a ridiculous misnomer. A janitor is making a living wage (because he/she can live on that wage), but Player doesn't think he's making a "living wage."

From wiki:

In public policy, a living wage or subsistence wage is the minimum income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation, although in many cases child care, education, saving for retirement, and less commonly legal fees and insurance may cost a family more than food, utilities, transport, or health care. In addition to this definition, living wage activists further define "living wage" as the wage equivalent to the poverty line for a family of four.

MIT has a living wage calculator (link below).

In Philadelphia, one person must earn $10.09 an hour working 2,080 hours a year (or 40 hours a week, $403.60 a week) to support his or herself. That's a little more than minimum wage.

If that person worked the amount that I work in a given week (65 hours), that person could make a living wage on $6.29 an hour. Just saying.

I ask player that question because I expect that even if her most important concern was met, she would still want to distort the market of corporate executive labor. Why? Perhaps, because she views herself and others as being victimized by the prices of a particular labor market--without providing the supporting evidence.

Deep down inside many of us, it's satisfying to make others suffer, and the justifications for doing so will be hodge-podge and plenty. The reasons against such an atrocious position will be distorted or ignored. C'est la vie.

A growing chorus of voices is pointing to the fact that whilst a certain level of inequality may benefit growth by rewarding risk takers and innovation, the levels of inequality now being seen are in fact economically damaging and inefficient. They limit the overall amount of growth, and at the same time mean that growth fails to benefit the majority. Consolidation of so much wealth and capital in so few hands is inefficient because it depresses demand, a point made famous by Henry Ford and more recently billionaire Nick Hanauer in his much-discussed TED talk. There quite simply is a limit to how many luxury yachts a person could want or own. Wages in many countries have barely risen in real terms for many years, with the majority of the gains being to capital instead. If this money were instead more evenly spread across the population then it would give more people more spending power, which in turn would drive growth and drive down inequality. The top 100 billionaires added $240 billion to their wealth in 2012- enough to end world poverty four times over. As a result growth in more equal countries is much more effective at reducing poverty. Oxfam research has shown that because it is so unequal, in South Africa even with sustained economic growth a million more people will be pushed into poverty by 2020 unless action is taken.

A growing chorus of voices is pointing to the fact that whilst a certain level of inequality may benefit growth by rewarding risk takers and innovation, the levels of inequality now being seen are in fact economically damaging and inefficient. They limit the overall amount of growth, and at the same time mean that growth fails to benefit the majority. Consolidation of so much wealth and capital in so few hands is inefficient because it depresses demand, a point made famous by Henry Ford and more recently billionaire Nick Hanauer in his much-discussed TED talk. There quite simply is a limit to how many luxury yachts a person could want or own. Wages in many countries have barely risen in real terms for many years, with the majority of the gains being to capital instead. If this money were instead more evenly spread across the population then it would give more people more spending power, which in turn would drive growth and drive down inequality. The top 100 billionaires added $240 billion to their wealth in 2012- enough to end world poverty four times over. As a result growth in more equal countries is much more effective at reducing poverty. Oxfam research has shown that because it is so unequal, in South Africa even with sustained economic growth a million more people will be pushed into poverty by 2020 unless action is taken.

BigBallinStalin wrote:Player, let's assume that "a living wage" is known and certain. So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

.[/quote]Actually, a living wage IS pretty well known. Its the cost of obtaining a decent house or apartment (decent = reasonably safe), utilities, food for x people (2 1 adult + one child or even just one adult) basic clothing (goodwill is fine) and healthcare.

roughly that would be, in most areas $500 + $200 + $400 + $30 a month. That is 1230 take home, though when I went over the figures in response to Nightstrike's "average welfare recipient gets...", the total was much higher, becuase I am going on lowball averages not skewed by places like San Francisco, etc.

Along those lines, place that have very high costs of living, such as CA bay area need to provide themselves (not depend on the rest of us) truly affordable housing or set much higher minimum wages themselves. It not up to us to supply their lifestyle. They choose to live in those areas and get the benefits and should be paying for it.

Yes, it would be irrelevant, as long as other "externalities" are not ignored. One reason our debt is so high is that we so often wind up paying for indirect and even some direct costs, be it clean up of pollution, damages for dangerous products (in both cases, too often the guilty companies are long gone before damages can be paid) or more indirect costs like the need to have an educated workforce , a stable and efficient transportation system and just plain basic stability. (folks shooting each other on Main Street don't make for good business of any type).

BigBallinStalin wrote:Player, let's assume that "a living wage" is known and certain. So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

To Player? No. She would add more elements to her "living wage."

Related aside - The term "living wage" is such a ridiculous misnomer. A janitor is making a living wage (because he/she can live on that wage), but Player doesn't think he's making a "living wage."

From wiki:

In public policy, a living wage or subsistence wage is the minimum income necessary for a worker to meet basic needs (for an extended period of time or for a lifetime). These needs include shelter (housing) and other incidentals such as clothing and nutrition. In some nations such as the United Kingdom and Switzerland, this standard generally means that a person working forty hours a week, with no additional income, should be able to afford a specified quality or quantity of housing, food, utilities, transport, health care, and recreation, although in many cases child care, education, saving for retirement, and less commonly legal fees and insurance may cost a family more than food, utilities, transport, or health care. In addition to this definition, living wage activists further define "living wage" as the wage equivalent to the poverty line for a family of four.

MIT has a living wage calculator (link below).

In Philadelphia, one person must earn $10.09 an hour working 2,080 hours a year (or 40 hours a week, $403.60 a week) to support his or herself. That's a little more than minimum wage.

If that person worked the amount that I work in a given week (65 hours), that person could make a living wage on $6.29 an hour. Just saying.

and try finding day care for 65 hours. Also, consider what life is like when you wind up working 65 hours, not just on occasion and not with the benefit of coming home to a nice fancy house, money to eat out and go on vacations, but with about the only entertainment you can afford is TV.

Hah, that's interesting, but not satisfying to others.

BigBallinStalin wrote: I ask player that question because I expect that even if her most important concern was met, she would still want to distort the market of corporate executive labor. Why? Perhaps, because she views herself and others as being victimized by the prices of a particular labor market--without providing the supporting evidence.

Cute. There is a saying about "assume".. you would do well to remember it.

The truth is that if I am a "victim".. and no, I don't consider myself one in that sense, it is that I have a lot of natural resource knowledge that is utterly dismissed by the likes of you becuase you lack the education to see how such knowledge or activity would benefit you in the long run. That is not your fault, it is the fault of folks in my profession who have not been proactive enough in educating people that paying for "the environment" is a long term benefit, just like paying for insurance or trash collection or many other things people would just as soon not have to pay, but adults realize they have to pay anyway.

Beyond that.... funny how you all seem to think everyone else needs to read what you write before commenting, but you feel perfectly free to only catch blips and starts of anyone disagreeing with you.

Says a lot about why folks are so divided of late. Its called not listening... assuming you know what other people think without bothering to verify your "facts" or even understanding other people's opinions.

BigBallinStalin wrote:Player, let's assume that "a living wage" is known and certain. So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

Actually, a living wage IS pretty well known. Its the cost of obtaining a decent house or apartment (decent = reasonably safe), utilities, food for x people (2 1 adult + one child or even just one adult) basic clothing (goodwill is fine) and healthcare.

roughly that would be, in most areas $500 + $200 + $400 + $30 a month. That is 1230 take home, though when I went over the figures in response to Nightstrike's "average welfare recipient gets...", the total was much higher, becuase I am going on lowball averages not skewed by places like San Francisco, etc.

Along those lines, place that have very high costs of living, such as CA bay area need to provide themselves (not depend on the rest of us) truly affordable housing or set much higher minimum wages themselves. It not up to us to supply their lifestyle. They choose to live in those areas and get the benefits and should be paying for it.

Yes, it would be irrelevant, as long as other "externalities" are not ignored. One reason our debt is so high is that we so often wind up paying for indirect and even some direct costs, be it clean up of pollution, damages for dangerous products (in both cases, too often the guilty companies are long gone before damages can be paid) or more indirect costs like the need to have an educated workforce , a stable and efficient transportation system and just plain basic stability. (folks shooting each other on Main Street don't make for good business of any type).

BUT, all of that is tied together. Its about responsibility.

Uhh... okay, I'll ask again:

So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

Not unless you also quantify how many employees the CEO employs vs. the unemployment rate.

I mean, companies have already done massive layoffs while those remaining got some wage increases (although most of those increases went to higher-ups, not the peons stuck doing double and triple jobs)... so that our country was stuck with a much higher unemployment rate than we used to have while those execs got exponential increases.

So, just raising the salaries of those "currently employed" to a living wage wouldn't cut it ethically or, for our country, financially.

thegreekdog wrote:Response to Player: First, shareholder and corporate officer profits are, for the most part, tied to the company's profits. Shareholders don't get dividends or an increase in the value of stock unless the company does well. Corporate officers don't get stock benefits (the vast majority of their compensation) unless the company does well. I can't speak to accounting gimmicks, but most people will tell you that inflated corporate profits are no longer an issue after Sarbanes-Oxley and Enron.

They may say that, but it's not really true.

The financial houses found new ways to inflate their profits, and that led to the current economic collapse.

How does it involve companies outside of mortagers? They bought the stocks, the Collateralized Debt Obligation packages that went onto the stock market, packages of high-risk loans that got combined with lower-risk loans into a package that went onto the markets as lower-risk, sold, resold, sold again, Mortgage backed Securities - backed by Fannie Mae/Freddie Mac. That buying/selling which was done outside of legalities (legalities being, someone was supposed to, by law, retain sufficient funds in their bank accounts just in case those debts went default) and the resultant cash paid as bonuses and dividends to the companies involved. NO ONE kept back the funds they were supposed to keep back, which is why when the debts did start going default, the country pretty much went bust... all that money had gotten paid out as additional salaries, bonuses, and stockholder dividends.

In other words, they found another accounting gimmick, exploited that one, too, and who got stuck holding the bag? Again, the taxpayers. Even without the bailouts, the little folk have suffered the most... and WITH the bailouts, that money was frequently used for more salaries, bonuses, and stockholder dividends.

For most of the guys at the top, they created themselves a win-win-win scenario because they had the power to do it.

It's just another example of corporate abuse of power, accounting gimmicks, and f*ck the peons.

The point here is, for LIFE "the company does well," has a different meaning if the reason "profit" is high is that tbey cut expenses because they laid off half the workforce, than "the company does well" by keeping employees and increasing revenues. But for "accounting" purposes, it's the same thing, the CEO gets his bonuses, the stockholders get their dividends, the peons get the shaft.. that's the gimmick, that's the immorality, and that's what's caused our financial messes.

BigBallinStalin wrote:So, if all employees were paid a living wage, would the different prices of different corporate executives become irrelevant?

Yes, as long as the company is still profitable. A unprofitable company will fail, so by definition, that matters.

But as stargazer indicated, the profits must be real and true, not simply gimmicks using government funding or accounting "tricks (moving debt from one entity to another without really paying it off, for example). Also, profit must be long term, not just a matter of months or a single year. Its too easy for companies in today's world to hide real debt and pretend profits when none really exist.

PLAYER57832 wrote:accounting "tricks (moving debt from one entity to another without really paying it off, for example).

What do you mean by this example? Are you referring to the things that Enron did, which are now completely illegal and for which top executives are now held personally liable, due to the Sarbanes-Oxley act?

PLAYER57832 wrote:accounting "tricks (moving debt from one entity to another without really paying it off, for example).

What do you mean by this example? Are you referring to the things that Enron did, which are now completely illegal and for which top executives are now held personally liable, due to the Sarbanes-Oxley act?

I think you're going to have to explain your interpretation and argument on this one Timminz.

PLAYER57832 wrote:accounting "tricks (moving debt from one entity to another without really paying it off, for example).

What do you mean by this example? Are you referring to the things that Enron did, which are now completely illegal and for which top executives are now held personally liable, due to the Sarbanes-Oxley act?

I think you're going to have to explain your interpretation and argument on this one Timminz.

My interpretation is that Player doesn't fully understand these supposed "accounting tricks" and the laws regarding them, but I want to give her the chance to clarify her example, rather than just assuming.

Enron were using methods of hiding debt in subsidiary companies, thus inflating the company's perceived value (which is the practice I assume Player was referring to). Shortly following Enron's collapse (as well as a few other huge accounting scandals, like Worldcom), the US passed the Sarbanes-Oxley act which, among other things, requires full consolidation of subsidiary companies (to prevent exactly what Enron had done) and requires that the top executives of public companies sign off personally on the financial statements, meaning they are now personally liable for any fraudulent financial statements, thus removing their ability to hide behind a limited liability corporation when the shit hits the fan.